AgriVisor Morning Marketwatch

Thursday, December 07, 2017
   ***Good Morning***

***** Grains are lower in the early trade; soybeans are 7-8 lower, corn fractionally lower, with wheat fractionally to 1 lower. ***** 

   # Export sales and Argentine weather are going to be the key ingredients moving the market today.  
   # The latest forecasts for Argentina remain mostly dry with only a few very light showers.   Some forecasters still see rain chances improving across southern Brazil and Argentina starting about mid-month.  It is still early, leaving plenty of time to produce a good crop.
   # Weekly export sales were well over expectations for soybeans, but at the low end for corn, and midpoint for wheat.  The sales are: 2.015 mmt soybeans, 876,400 tons of corn, and 321,400 tons of wheat. Along with soybeans, soymeal sales, 166,400 tons, were respectable.
   # The is talk out of China that the govt. is slowing GMO safety certificates again, but that could be an old story; we have heard the reverse.  In any case, China soybean futures were lower in the overnight trade. 
   # Polls are coming out for next week’s USDA WASDE numbers.  Changes are not expected to be significant.  On one, the averages for the ending stocks change: wheat +3, corn -7, and soybeans +13.  The biggest shift is likely tied to talk of a reduction in the soybean export forecast.  There is some talk about an increase in corn ethanol grind, but we remind you it is very early in the marketing year for corn/soybeans.
   # Malaysian palm oil futures dropped to new 6 month lows amid talk the stocks could jump to 2 mln. tons.
   # Keep an eye on stories about Brazil’s 2nd crop corn.  Monsanto is talking up the idea it could drop 20-30% because of the late soybean plantings and the low prices.  However, the Brazilian Real has turned lower over the last couple of weeks.
   # The Dollar is holding small gains in the early trade with the tax reform bill moving forward; House and Senate will begin conferencing soon to produce a bill that’s done ahead of Christmas. Wednesday’s jobs number is adding support, while geopolitical tensions are keeping a lid on the Dollar for now.

***** Cattle should start the day steady/weak; Lean hogs slightly lower. *****  

   # Wholesale beef is sharply lower with choice at $206.40. The industry is more focused on futures weakness, but the wholesale weakness will weigh on the cash trade at week’s end.  Generally, everyone was anticipating modest beef strength in December, but have become cautious with the weakness over the last week.
   # Wholesale pork is sharply lower at $82.75. Cash hog prices are expected to start the day a little lower with the weak wholesale market and indications numbers are abundant.